JPMorgan Chase: Bargain Bank Stock Winner

NEW YORK ( TheStreet) -- JPMorgan Chase ( JPM) was the winner among large-cap U.S. banks on Wednesday, with shares rising 2.7% to close at $51.70.

The broad indices ended mixed, as the business media focused on the latest federal "fiscal cliff." Unless Congress and President Obama agree on a new budget, after the fiscal 2014 budget deadline of Oct. 1, many federal agencies will shut down. U.S. Treasury Secretary Jack Lew in a letter to Speaker of the House John Boehner (R., Ohio) on Wednesday said the "extraordinary measures" the Treasury was taking to maintain its borrowing power will "be exhausted no later than Oct. 17," unless the $16.7 trillion federal debt limit is raised.

KBW Bank Index ( I:BKX) was up 0.7% to close at 62.74, with 24 index components ending with gains, except for U.S. Bancorp ( USB) of Minneapolis, which was down slightly to close at $36.76.

Some investors may have been surprised at the strong showing on Wednesday for JPMorgan's shares, following a Wall Street Journal report Tuesday night saying the Department of Justice had rejected a $3 billion offer from the nation's largest bank to settle various federal and state investigations related to sales of mortgage-backed securities. The offer was rejected as "too low for the number of cases involved," according to the report; "the discussions have widened to include other investigations of J.P. Morgan, and the final tally could be larger," according to the Journal's unnamed source.

JPMorgan last Thursday entered into a $920 million settlement with four regulators over the 2012 "London Whale" hedge trading debacle. Also on Thursday, the Consumer Financial Protection Bureau said JPMorgan had already refunded $309 million to 2.1 customers, with the Office of the Comptroller of the Currency also assessing a $60 million fine, spring from the two regulators' combined investigation of its " illegal credit card practices."

Then on Monday, the New York Times Dealbook reported that "the Justice Department and the Department of Housing and Urban Development have discussed the possibility of striking a wide-ranging settlement to conclude many of the looming mortgage investigations from federal authorities and state attorneys general" against JPMorgan. According to the report, a $20 billion settlement had been "discussed at the bank," although "it is not clear who proposed that number."